Key Takeaway
September 2026 data present an unusual combination: economic activity remains resilient despite high interest rates and an energy shock. In the United States, the September flash business-activity index signaled the fastest output growth in more than five years. In Georgia, real economic growth averaged 7.9% in the first seven months of 2026. Strong growth is positive, but when inflation is also above target it creates a harder policy problem: how to preserve momentum without allowing price pressures to become entrenched.
The U.S. signal: strong activity, expensive money
S&P Global’s flash U.S. Composite PMI rose to 58.4 in September from 56.0 in August, with readings above 50 indicating expansion. S&P Global said output growth was the fastest since July 2021 and payroll growth the strongest in more than four years. At the same time, input-cost inflation accelerated to a near four-year high, partly because of renewed energy-price pressure and capacity constraints.
The 24 September edition of The Wall Street Journal captured the market consequence: unexpectedly resilient growth and inflation pressure contributed to a sharp bond-market selloff. The important point is that resilient growth can complicate monetary easing. If companies face rising energy, labor and supply costs while demand remains strong, they may have more ability to pass those costs on to customers.
Investment is also reshaping growth
The AI investment boom is part of the U.S. story. The Wall Street Journal reported that seasonally adjusted private spending on data-center construction reached $37 billion through July 2026, about $9 billion more than in the first seven months of the previous year. The build-out is supporting demand for electricity, land, construction resources and skilled labor.
This also illustrates why aggregate growth can be misleading if treated as uniform. Technology-related capital expenditure may be exceptionally strong while other construction or parts of the labor market remain weaker. A resilient headline economy does not mean that every company or household experiences the same conditions.
Georgia: growth remains strong
Georgia is also showing economic resilience. According to the National Bank of Georgia’s 9 September monetary-policy decision, preliminary real GDP growth was 8.0% in July and averaged 7.9% in the first seven months of 2026. The central bank points to structural changes that have increased the contribution of relatively high-productivity and less import-intensive sectors.
The result is notable relative to the International Monetary Fund’s June 2026 Article IV projection. The IMF projected Georgia’s real GDP growth at 6.5% for the full year, following 7.5% in 2025, and expected growth to gradually converge toward a medium-term potential rate of around 5% by 2028. The first seven months do not yet show a clear slowdown to that pace, but a year-to-date growth rate should not be treated as a final annual outcome.
Why momentum has held up
One explanation is the changing structure of Georgia’s economy. The IMF identified information and communication technology, transport and education services among important supply-side drivers in early 2026. On the demand side, private consumption remained a major contributor, supported by still-solid real wage and consumer-credit growth.
The composition matters. If relatively productive and less import-intensive activities account for more growth, the economy can expand without generating the same degree of external imbalance as a consumption- and import-heavy boom. The National Bank of Georgia has highlighted this structural shift, although its persistence remains uncertain.
The other side of resilience: inflation
Annual inflation in Georgia was 5.6% in August 2026, 2.6 percentage points above the National Bank of Georgia’s 3% target. The central bank said the overshoot was still driven largely by supply shocks, especially higher energy prices. Core inflation stood at 3.6%, while services inflation was 4.4%, suggesting that headline inflation cannot be explained simply by excessive domestic demand.
This is why strong growth and elevated inflation are a difficult combination. Higher interest rates cannot reduce the international price of energy. But if an external shock spreads into wages, services and inflation expectations, temporary inflation can become more persistent. The National Bank of Georgia therefore kept the policy rate unchanged at 8.25% on 9 September.
What this means for business
Strong economic growth generally supports demand, but the 2026 environment is more complicated. Higher sales can coincide with higher energy, transport, financing and labor costs. Turnover growth therefore does not automatically translate into stronger profits.
The cost of capital is especially important for companies financing expansion with debt. A fast-growing market can make investment attractive, but an 8.25% policy rate signals that financing conditions remain relatively tight. Projects are more resilient when their cash flows can withstand changes in prices and borrowing costs rather than relying on permanently strong demand.
According to an assessment by BTU researchers, the central business question for Georgia in 2026 is no longer simply whether growth continues. The more useful question is what the growth consists of: which sectors are generating value added, how productive new investment is, whether real incomes are rising and how much nominal revenue growth is being absorbed by higher prices.
What to watch next
The first indicator is the composition of inflation. If the energy shock fades while core inflation remains near target, strong growth will be less problematic for monetary policy. Services inflation is another important signal because it can reveal more persistent domestic cost and demand pressures. Credit and wage growth also matter because excessive acceleration could add demand-side pressure.
The second issue is the sectoral quality of growth. If expansion increasingly comes from productive, exportable or less import-intensive sectors, potential output may itself be rising. In that case, high growth does not automatically mean overheating. If growth becomes more dependent on consumption, imports and credit, the inflation and external-balance risks would be larger.
Conclusion
As of September 2026, the data do not point to a sharp economic slowdown either in U.S. business activity or in Georgia’s current growth rate. Yet resilient growth is no longer an uncomplicated positive. When it coexists with an energy shock, above-target inflation and expensive money, the focus shifts from the quantity of growth to its quality.
For Georgia, the favorable outcome would be one in which growth increasingly reflects productivity and greater productive capacity, while inflation returns toward the 3% target as external shocks fade. Current data demonstrate resilience, but they do not justify assuming that the same pace will continue automatically. For businesses and policymakers, the key question is not only how fast the economy is growing, but how sustainable that speed is.
Data and Main Sources
S&P Global Market Intelligence, Flash U.S. PMI, 23 September 2026; The Wall Street Journal, 24 September 2026; National Bank of Georgia, Monetary Policy Committee decision, 9 September 2026; International Monetary Fund, Georgia: 2026 Article IV Consultation, 10 June 2026; Georgia’s National Statistics Office, current 2026 national-accounts and economic-activity statistics.
Prepared by the academic team of Business and Technology University and the BTUAI Research Team, Tbilisi, Georgia.